The Central Bank of Russia held its benchmark refinancing rate unchanged at 8.25% and the overnight auction-based repurchase rate at 5.50%, while also leaving reserve requirements unchanged, and the fixed overnight deposit rate at 3.50%. The Bank said: "The decision was supported by the assessment of inflation risks and risks to the sustainability of economic growth, including those associated with the uncertainty of the global economic conditions." And also noted: "considering current domestic and external economic conditions and the effect of the monetary policy measures, implemented in recent months, the Bank of Russia judged that the current level of money market interest rates was appropriate to maintain the balance between inflation risks and risks to economic activity in the coming months".
The Bank last raised the fixed overnight deposit rate by 25bps to 3.50% in May, and the benchmark refinancing rate by 25 basis points to 8.25% in April this year. Russia reported annual inflation of 9% in July, down slightly from 9.4% in June, meanwhile Bank Chairman Sergey Ignatiev is trying to keep inflation between 6% and 7%. Deputy Economy Minister, Andrei Klepach, said full-year inflation may be towards the lower end of the government's 6.5-7.5% forecast. Russian economic growth slowed to 4.1% in the first quarter of 2011, down from 4.5% in the December quarter of 2010; the IMF is expecting 4.5% growth for the full year.